Current Specials:
Special:
Reinhart & Rogoff Debacle (updated)
Roundups &
Commentary
News – Between
The Hedges
Markets – Between
The Hedges
Daily Interest Rate Monitor – Global
Macro Monitor
Recap – Global
Macro Trading
The Closer – alphaville / FT
US: Macro Collapse
Pushes S&P 500 To New All-Time High – ZH
EUROPE
Which way for the ECB? – Bruegel
Ahead of the ECB
meeting, the debate on the right course for euro area macroeconomic policies
has re-emerged. An interesting new feature of the debate is about
differentiating monetary policy to better cater for different conditions in
different countries of the euro area. So should there be more differentiation
of monetary policy across countries and how much can monetary policy achieve?
Draghi will act to avoid deflationary spiral – Sober
Look´
The ECB will have no
choice but to ease policy and possibly prepare for more drastic actions. The
Eurozone is facing a growing risk of deflation - similar to Japan. Once the inflation rate fell below 1% in Japan, the external shock of the Asian currency
crisis (late 90s) sent Japan into a deflationary spiral.
Mads Koefoed: There is
still a long way to go for Spain, but the economy saw improvement in the first
quarter of 2013. We look for further improvement in the coming quarters, but
there will be no escaping the claws of recession this year.
The first left-right
coalition in Italy since 1946 has survived its first confidence motion in both chambers.
As difficult as it may have been to break the political logjam, the hard work
lies ahead for Prime Minister Letta.
Italian Prime Minister
Enrico Letta, fresh from winning a confidence vote in parliament, told Germany on Tuesday his government would meet its
budget commitments but expected Europe to drop
its austerity mantra and do more to lift growth.
MACRO
NUMBERS
Euro-Area 1.2% Inflation Adds Pressure for ECB
Rate Cut – BB
Euro-area inflation at
a three-year low and record unemployment increased pressure on the ECB to cut
interest rates later this week to spur lending and growth.
Euro-Area Unemployment
Increases to Record 12.1% Amid Recession – BB
Record jobless in Euro
zone pushes ECB to act – Reuters
Europe's Scariest Chart Leaves 1 in 4 Young People
Unemployed – ZH
Europe bleeds out – Free exchange
/ The Economist
UNITED STATES
361 Capital Weekly Research Briefing – The
Big Picture
FEDERAL
RESERVE
Fed unlikely to expand QE – FOMC preview – Nordea
Despite the recent
round of weak data we do not expect an overly dovish tone to the post-meeting
statement tomorrow. Still, a potential surprise would be if the FOMC is worried
about disinflation.
FOMC preview, May 2013 – Money
Supply / FT
This FOMC meeting is
unlikely to generate much action beyond tweaks to the language on the economy.
The next move is still likely to be a taper of QE3, but unless there is a rapid
turn in the data, September now seems the earliest plausible date.
Why the Fed probably won't expand QE on
Wednesday – WP
1) Fed leaders have
been sensitive to the risk that through the quantitative easing they could
completely take over the market for U.S. Treasury debt 2) Maybe quantitative
easing doesn’t affect the economy so much on its own terms, by pushing money
into the financial system. Maybe it is more important as a communications tool.
MACRO
NUMBERS
Chicago PMI Implodes To 49, First Sub-50 Print Since
September 2009 – ZH
Looking for Inflation?
It Vanished – WSJ
Home prices rise, seen
helping economic recovery – Reuters
OTHER
EURUSD – technical momentum favouring upside,
but... – TradingFloor
John J Hardy: More
poor data out of the US has the USD on the defensive as the market
begins to price in a dovish FOMC tomorrow. With EURUSD pulling to the highest
levels in almost two weeks, we look at the scenarios from here.
Austerity exposes the global threat from tax
havens – The
A-List / FT
Jeffrey Sachs: The
curtain has been pulled aside on the once secret world of tax havens, and the
scale of abuse is nearly beyond reckoning. Week after week, Americans and
Europeans worn down by budget austerity have learnt about the secret accounts
of their politicians, tax evasion by leading companies and hot money
destabilising the world economy. The darker truth is that these havens are not
gaps in the world’s financial system; they are the system.